CH Energy Group, Inc. Announces Sale of Griffith Energy Services, Inc.
CH Energy Group, Inc. (CH Energy Group), indirect wholly owned subsidiary of Fortis Inc. (TSX:FTS), announced it has entered into a definitive agreement under which subsidiary Griffith Energy Services, Inc. (Griffith) will be acquired by Star Gas Partners, L.P. (Star Gas) (NYSE:SGU).
Under the terms of the agreement, Star Gas will acquire the equity of Griffith for US$69.9 million plus working capital, which will be determined at closing. The acquisition is anticipated to close during the first quarter of 2014, subject to customary closing conditions and regulatory approval.
Star Gas is the nation's largest retail distributor of home heating oil, based upon sales volume, operating throughout the Northeast and Mid-Atlantic, with sales of more than US$1.7 billion in fiscal year 2013.
Griffith is a leading energy services provider in the Mid-Atlantic region, distributing heating oil, motor fuels and propane and providing HVAC services to both residential and commercial customers. Griffith has operations in Virginia, West Virginia, Delaware, District of Columbia, Maryland, and Pennsylvania.
"Griffith is a success story, capably expanding its customer base and services since first joining us in 2000," said Steven V. Lant, Chief Executive Officer of CH Energy Group and Central Hudson Enterprises Corp., holding companies for Griffith. "We are proud of Griffith's growth and accomplishments, and believe Star Gas to be the right partner for the company. CH Energy Group has exited this business sector so that we can concentrate on the management of our utility holdings. We wish both Griffith and Star Gas much success in the future, as we focus on our core operations as a New York regulated utility company."
Completion of the transaction is subject to, among other things, regulatory approvals including approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions.
Fortis Inc. is the largest investor-owned gas and electric distribution utility in Canada. Its regulated utilities account for 90 per cent of total assets and serve more than 2.4 million customers across Canada and in New York State and the Caribbean. Fortis owns non-regulated hydroelectric generation assets in Canada, Belize and Upstate New York. The Corporation's non-utility investments are comprised of hotels and commercial real estate in Canada and petroleum supply operations in the Mid-Atlantic Region of the United States.
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